Psychological levels in Bitcoin matter a lot. These levels include prices like $60,000, $65,000 etc. People want to buy and sell and these levels because mentally it just makes more sense to buy and sell at a round number.
Bitcoin dropping below $65,000 and $60,000 for the first time since 15 October 2024 essentially makes the bears much stronger, because of the fact that the price of Bitcoin has dropped to lower psychological levels. This gives them confidence that it might drop below and go all the way down to $55,000.
We have also seen many large capital investors closing their positions so they can reduce their risk exposure, this just takes away from the bulls and gives a lot of opportunity for the bears to keep pushing price down. Contrary to popular belief, a reason that caused big impact in crypto is dollar instability. While many investors are looking for the new safe haven currency, they want to minimize risk, and with Bitcoin dropping non-stop, this just gives them more reason to take the risk off and close their positions in Bitcoin.
Despite all the “bad news”, it doesn’t really seem like this drop will continue for very long, there are major support levels around $52,000 to $57,000. These will be levels that a lot of investors will probably start to buy Bitcoin again. Simply because of its low price and the fact that there aren’t any major support levels below that, which essentially tells them that there is not really any reason to continue selling.
The dollar will also not be unstable for much longer; this will help the overall market to calm down and that will more than likely be where Bitcoin starts to consolidate and essentially “bottom out” which just means it will stop dropping so aggressively and very soon start rallying.
Now, it’s very possible for Bitcoin to just decide to go to $40,000 or $30,000, it can even go to $20,000, nobody knows where it will stop and investors can only take their best guess and make sure to manage risk properly. The people that lose the most money in these markets are the high leverage traders and those that go all in on certain levels, simply because they believe they have timed the bottom perfectly, only to later find out that the price kept dropping.
Be vigilant and make calculated decisions while managing risk.
(Not financial advice, just my opinion)